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The determinants of coagglomeration: Evidence from functional employment patterns

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  • Behrens, Kristian
  • Guillain, Rachel

Abstract

Locations differ horizontally in the industry mix they host and vertically in the value-chain functions they perform. Since industry pairs should coagglomerate the functions that interact intensively across industries, analyzing horizontal and vertical patterns can improve our understanding of agglomeration mechanisms. We find that different functions within the same industry pairs display substantially different coagglomeration patterns. While production coagglomerates at longer distances, management and research coagglomerates at short distances. These patterns are consistent with our findings that buyer-supplier links and local labor pools are important for production, whereas they matter less for management and research that rely on shared knowledge. Our results provide support for agglomeration theories and show that extant estimates of average effects based on total employment mask substantial heterogeneity.

Suggested Citation

  • Behrens, Kristian & Guillain, Rachel, 2017. "The determinants of coagglomeration: Evidence from functional employment patterns," CEPR Discussion Papers 11884, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:11884
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    References listed on IDEAS

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    Cited by:

    1. Ekaterina Aleksandrova & Kristian Behrens & Maria Kuznetsova, 2020. "Manufacturing (co)agglomeration in a transition country: Evidence from Russia," Journal of Regional Science, Wiley Blackwell, vol. 60(1), pages 88-128, January.
    2. Acosta, Camilo & Lyngemark, Ditte Håkonsson, 2021. "The internal spatial organization of firms: Evidence from Denmark," Journal of Urban Economics, Elsevier, vol. 124(C).

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    More about this item

    Keywords

    agglomeration mechanisms; coagglomeration; Duranton-Overman index; functional specialization;
    All these keywords.

    JEL classification:

    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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